Deoraj v Maharaj NO

• Jurisdiction: South Africa
• Judge: Jeffrey AJ
• Judgment Date: 28 February 2014
• Docket Number: 1041/2014
• Court: KwaZulu-Natal High Court, Durban
• Hearing Date: 24 February 2014
• Citation: 2014 JDR 0347 (KZD)

Jeffrey AJ:

[1]

The applicants seek an interim interdict restraining the joint

2014 JDR 0347 p2

Jeffrey AJ:

trustees of an insolvent estate from alienating or otherwise dealing with certain immovable property pending the final determination of proceedings that the applicants intend to institute for a direction by the Court in terms of s 20(1)(c) of the Insolvency Act No. 24 of 1936 that the sheriff must proceed to transfer the property to them that was purchased on a sale in execution that was held before the execution debtor's estate was sequestrated.

[2]

During October 2012 the first applicant purchased the property on a sale in execution for R190 000.00. This sale was conducted by the sheriff at the instance of the execution creditor, the Peoples Bank Ltd, in execution of a judgment that it had obtained against the execution debtor. As I understood Mr Hollis, who appeared for the trustees with Ms Stridutt, the execution creditor is now, as he broadly submitted, 'part of Nedbank'. In any event and since no dispute of fact arose on the papers or during argument concerning the sixth respondent's status, I will assume, without deciding, that Nedbank Limited, who is cited as the sixth respondent, is the mortgagee of the property and hence a secured creditor in the execution debtor's insolvent estate.

[3]

The second applicant is the first applicant's wife and, all things being equal, the registration of transfer of this property would have been registered in the applicants' joint names.

2014 JDR 0347 p3

Jeffrey AJ:

[4]

This, however, did not come to pass.

[5]

After the date of the sale in execution, but before the transfer of the property could be registered in the names of the applicants - due to a delay which I will outline below - the execution debtor's estate was provisionally sequestrated on 29 April 2013 and a final order of sequestration was granted 27 May 2013.

[6]

The first, second and third respondents were duly appointed by the Master as the provisional joint trustees of the execution debtor's insolvent estate on 13 June 2013 and their appointment was made final on 9 September 2013. I will refer to the joint trustees collectively as the trustees.

[7]

Soon after the sale in execution and during or about November 2012 and obviously oblivious to the future troubles that this property would bring to him, the first applicant, as he was then obliged to do, paid the 10% deposit of the purchase price to the sheriff and secured the balance of the purchase price that would have to be paid on registration of transfer. He also paid the sheriff his commission and he paid the conveyancing attorneys all their relevant fees and disbursements to enable them to attend to the registration of transfer.

[8]

If all had gone as the applicants had anticipated, the sheriff would

2014 JDR 0347 p4

Jeffrey AJ:

have caused transfer of the property to be given them shortly thereafter.

[9]

But the applicants were informed by the conveyancing attorneys that they were unable to proceed with it because the eThekweni Municipality had refused to issue a rates clearance certificate. It transpired that there were structures on the property that had been built without approved building plans. The first applicant tried to remedy this by having the necessary plans prepared and retrospectively approved. But the municipality refused to accept his application because it required the application to be made not by him, but by the registered owner – namely, the execution debtor. This requirement proved impossible for the first applicant to achieve and this impasse eventually led to an application being made to this Court by the applicants for an order directing the sheriff to sign the necessary application to enable it to be submitted to the municipality for the approval of the plans.

[10]

That order was granted on 3 September 2013 and, pursuant thereto, the applicants aver that the plans have been submitted to the municipality. It has yet to make a decision.

[11]

The applicants took possession and control of the property shortly after the sale in execution but they were unable to occupy the house because of the dilapidated state it had fallen into. The first

2014 JDR 0347 p5

Jeffrey AJ:

applicant, however, says he secured the property by chaining and locking the gate and allowed an acquaintance of his to occupy one of the outbuildings to keep an eye on the property. He also says that he expended a sum in excess of some R380 000.00 on security, renovation, upgrading and upkeep of the property. These allegations are disputed by the trustees at the level of questions being posed by them as to whether the expenses incurred or work done was necessary. But the trustees' response is largely argumentative. I find, having regard to the inherent probabilities of this matter, that the applicants have expended money on the security, renovation, upgrading and upkeep of the property even although precise extent and cost thereof has not been accurately established. In making this finding I have applied the usual approach in applications of this nature as laid down in Webster v Mitchell 1948 (1) SA 1186 (W) 1189 and qualified in Gool v Minister of Justice 1955 (2) SA 682 (C) 688D-E.

[12]

During or about October 2013 the matter took a new turn. The applicants were despoiled by the execution debtor. This resulted in spoliation proceedings being brought against her. This application was unopposed and an interim order was granted by this Court on 1 November 2013 restoring possession of the property to them. The rule nisi was later confirmed on 2 December 2013.

2014 JDR 0347 p6

Jeffrey AJ:

[13]

The first applicant alleged that it was only discovered during the spoliation application that the execution debtor's estate had been sequestrated. But it is clear from the allegations in the trustees answering affidavit, confirmed by the conveyancing attorneys, that these attorneys became aware of the sequestration on 22 August 2013 and that they informed the second applicant of this on the same day. It was further alleged that the second applicant told the conveyancing secretary who spoke to her that the first applicant was bringing an application for 'the purpose of submitting plans'.

[14]

The first applicant went on to allege that on or about 4 November 2013, the applicants' attorneys contacted the execution debtor who referred them to the trustees. The applicants' attorneys wrote to the trustees who confirmed in reply on 18 November 2013 that the execution debtor's estate had been sequestrated. The trustees added:

'We are aware that your client purchased the property in execution however we have informed the bondholder that the trustees will not ratify that sale because a much higher price was achieved by Ian Wyles Auctioneers.'

Even if I accept the trustees' version that the applicants were aware of the supervening sequestration of the execution debtor on or about 22 August 2013 during the course of the course of the application concerning the submission of the plans to the municipality and before the first spoliation application was

2014 JDR 0347 p7

Jeffrey AJ:

instituted, the...